Recently, cryptocurrencies appear one after another by using various forms of cryptography systems. For example, there are Litecoin, Peercoin, Namecoin, etc. other than Bitcoin which is the first digital money with the largest scale.
Bitcoin which was developed in January 2009 by a programmer under a pseudonym of Satoshi Nakamoto is not money used in real lives but virtual money used for online transactions. It is known that an unidentified person named Satoshi Nakamoto devised Bitcoin in 2008 against central banks in countries, which have monopolized the issuance of currencies and administered monetary policies arbitrarily. A system for administering Bitcoin allows Bitcoin to be provided in return for solving very difficult mathematical problems suggested by computer and it is provided as an open source by applying an MIT license. As computer programming code for the Bitcoin is revealed to the public just like Linux as a computer operating system, any developer may participate in programming upgrade for the Bitcoin.
A process of creating Bitcoin is called “mining” and those who get Bitcoin in the way are called “miners.” Starting mining in 2009, approximately 12 million bitcoins were mined as of March 2014. When it was first designed, it was set to mine a total of 21 million bitcoins until 2145. So bitcoins will be depleted when roughly 8 million bitcoins are mined in the future. Those who are not miners may purchase bitcoins to make transactions.
Next to Bitcoin, the second best-known cryptocurrency is Litecoin. In October 2011, Charlie Lee, a former Google employee, developed the Litecoin by modifying Bitcoin. While Bitcoin becomes difficult to be mined due to the sharply increased number of participants, Litecoin has a high mining efficiency.
Peercoin was developed by a software developer Sunny King in August last year, inspired by Bitcoin. It is “eco-friendly money” system that may be mined more when the energy efficiency of computers increases.
Next to them, new currencies such as Gridcoin, Fireflycoin, and Zeuscoin have been developed. Their principles are mostly similar to Bitcoin but their values are determined by putting difference in mining system or mining speed.
The Wall Street Journal recently reported that the Bitcoin craze had spawned more than 80 virtual currencies.
However, there is a lack of effort to produce, distribute, and play digital contents by using such digital currencies.
Besides, it should be convenient for a user to pay with the digital currency for contents, but there are problems including registration of an account, an exposure of private information, etc. for the payment of the digital currency and it has drawbacks in that the user must provide personal information to a variety of individual content providers to consume the contents.